Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: We're live in DeSoto, Kansas at Panasonic's brand new EV
Speaker 2: battery plant four point seven million square feet at full capacity,
Speaker 2: which will happen later this year. So news we broke
Speaker 2: with Panasonic's North America CEO Megan Young one lee thirty
Speaker 2: gig or hours of capacity. That's enough cells for five
Speaker 2: hundred thousand EV's Parana one of the key customers Lucid,
Speaker 2: and Lucid CEO Mark went Off Interim CEO Mark winter
Speaker 2: Off is with us. Now. This is a significant moment
Speaker 2: for you as well, because your first domestic supply of
Speaker 2: cells reflect on that.
Speaker 1: That is true. Yeah, So currently we're getting our battery
Speaker 1: supplies either from Japan or from Korea, depending on the supplier,
Speaker 1: and Panasonic is a great partner for us. We decided
Speaker 1: two and a half years ago to make together this
Speaker 1: investment here and to localize the production. That's hope for
Speaker 1: bugs from here to country.
Speaker 2: It's not just volume supply. This is twenty one seventy.
Speaker 2: But my understanding is there were some co engineering to
Speaker 2: make this as good as it can possibly be. Explain
Speaker 2: how that works.
Speaker 1: It's a great collaboration between our engineering departments and their
Speaker 1: engineering department. We bring in a lot of experience on
Speaker 1: what this cell is supposed to do in real life,
Speaker 1: and they make it happen with you know, chemistry and
Speaker 1: with all of the parameters of the cell. So it
Speaker 1: was really really great collaboration. And that we also then
Speaker 1: are able now to produce us here locally obviously in
Speaker 1: the current climate, helps us a lot.
Speaker 2: How did the economics of the DeSoto Candice May twenty one,
Speaker 2: seventy stack. I know that you love charts and spreadsheets
Speaker 2: as much as I do, but you must have done
Speaker 2: that analysis.
Speaker 1: Yeah, absolutely, I mean, like I would say, we wouldn't
Speaker 1: have done it if it wouldn't be economically feasible or beneficial.
Speaker 1: As I mentioned before, we made that decision, not just
Speaker 1: recently so terriffs were not on the radar screen at
Speaker 1: that time. We did that decision two and a half
Speaker 1: years ago, and at that time, together with the forty
Speaker 1: five x incentive text credit, the economics make sense. I
Speaker 1: still have to say, and I hope the Panasic sonic
Speaker 1: here's that that you know, there's some room of improvement.
Speaker 1: But also right now, obviously with the tariffs, this is
Speaker 1: a very good move for us.
Speaker 2: Because the same cell that would otherwise have come from
Speaker 2: Japan or Career is subject to tariffs. It is that's
Speaker 2: a part of the equation that is correct.
Speaker 1: And the other thing that we are currently working on
Speaker 1: together with Panasonic is obviously further localizing the supply chain
Speaker 1: for the cell, because it doesn't do you a lot
Speaker 1: of good if your manufacture here, but you still import
Speaker 1: the raw material, which is then subject to teriffs. So
Speaker 1: we're already doing a lot of investments in that. You
Speaker 1: heard about our graphite one investments on the graphite and
Speaker 1: other materials, so we're working with them on making that
Speaker 1: happen as well.
Speaker 2: Mark, I've covered Lucid for a number of years. This
Speaker 2: is the first time you and I have spoken, and
Speaker 2: I'm grateful for your time. Your predecept sessor Peter Robinson
Speaker 2: had a very simple argument. Lucid had the best technology
Speaker 2: on the hardware side and software battery management system. And
Speaker 2: even though your journey started in the premium segments, that
Speaker 2: you would scale to volume because you would just say
Speaker 2: this performance and range in this pack, we can just
Speaker 2: scale it down make a more affordable version. Have we
Speaker 2: hit that inflection point yet?
Speaker 1: Well, I mean we're about to you know, everybody knows
Speaker 1: by now that follows loserd that you know, we are
Speaker 1: very very strongly working on our mid sized platform, right,
Speaker 1: which is a you know, smaller platform also from a
Speaker 1: price point perspective, more in the round, in the fifty
Speaker 1: thousand dollars range and not where we are right now,
Speaker 1: and that's when we really hit that inflection point. But
Speaker 1: mister gravity that we are ramping up right now, we're
Speaker 1: already expecting to have much higher numbers that we had.
Speaker 2: In the past, right, I think, you know, there's a
Speaker 2: lot of work to do in the second half of
Speaker 2: the year to reach twenty thousand. What role does the
Speaker 2: DeSoto plant play. Will you be able to get hold
Speaker 2: of sales from here for vehicles sold or delivered in
Speaker 2: this calendar year?
Speaker 1: No, not yet, okay, so something that is something for
Speaker 1: next year. And again with our partners with Panasonic, we
Speaker 1: are working on opportunities to further bring this in because
Speaker 1: obviously in the current climate, that is very important for
Speaker 1: us to localize.
Speaker 2: We've focused this morning a lot on policy. You've brought
Speaker 2: up the forty five X credit, but the consumer credit
Speaker 2: of seven thousand, five hundred dollars likely no more. What
Speaker 2: can you do in that environment with the vehicle? Are
Speaker 2: you able to pull forward lower price point variant? Are
Speaker 2: you looking to just appeal to the premium segment on
Speaker 2: an ongoing basis.
Speaker 1: Well, first of all, when it comes to our our
Speaker 1: current vehicles with the Air, it might not be widely known,
Speaker 1: but we are the best selling vehicle in our segment,
Speaker 1: the best selling ev and we also were in the
Speaker 1: second half of last year. Actually know, in the beginning
Speaker 1: of this year, we were the best selling vehicle in
Speaker 1: the whole segment, including ice vehicles. So the Air is
Speaker 1: actually doing well, although the numbers are obviously when you
Speaker 1: look at the broader scheme of things, I'm not that
Speaker 1: high yet, but that's because of the size of the segment.
Speaker 1: With gravity, obviously, we're now reaching a different scale and
Speaker 1: we're still ramping up the production and as you said,
Speaker 1: we have to do quite a lot in order to
Speaker 1: get to our target for this year. But it's going well.
Speaker 1: We're unclocking some of the blockages that we had in
Speaker 1: the supply chain, and our plant really got into the
Speaker 1: groove to create the vehicle. So I would say the
Speaker 1: inflection point of having really economics of scale is still
Speaker 1: a little bit out. We're still were appealing to the
Speaker 1: higher price segment. That's what we have. And I mean
Speaker 1: in automotive, you cannot just decide, oh, let's let's put
Speaker 1: out a new cheaper variant next week. It takes ten
Speaker 1: years to implement, to plan, to engineer, to validate. So
Speaker 1: that's that's sometimes you know, not well understood that manufacturing
Speaker 1: and then building great cars is a long term game.
Speaker 1: You have to build also, economics of scale over time.
Speaker 1: It's not something that happens from one day to the odd.
Speaker 2: I'll hold you to it. Twenty thousand is realistic this
Speaker 2: year with the time left to you.
Speaker 1: We're in a quiet period right now, so I cannot
Speaker 1: really talk about it. I suggest you tune in in
Speaker 1: our earnings call on August fifth. I will do and
Speaker 1: you will definitely hear about it.
Speaker 2: And the mid sized platform is on track for next year.
Speaker 1: And the same applies to that as well. We're working
Speaker 1: very hard, but on August fifth there will be news
Speaker 1: on them.
Speaker 2: The other part of Lucid's history was idea of partnerships,
Speaker 2: manufacturing partnerships licensing technology. Has that idea change given the
Speaker 2: political environment.
Speaker 1: No, actually no, it hasn't so as a matter of fact,
Speaker 1: And I said that in the last couple of months,
Speaker 1: and everybody honestly understandably asked me, okay, where is it?
Speaker 1: Where is it again? Those things take time, and particularly
Speaker 1: in the last couple of months with the uncertainty of
Speaker 1: the terrorists. Have to say, many of the people we
Speaker 1: had conversations was to have other issues, you know, they
Speaker 1: have pressing things to solve right now. In the last
Speaker 1: quarter we also, on top of that, had you know,
Speaker 1: the magnet shortage which actually halted production for several players.
Speaker 1: So those discussions still happen on our EV court technology,
Speaker 1: but also beyond that, stay tuned, there will be other
Speaker 1: news also.
Speaker 2: Those potential partners, though motivated by the environment, the effort
Speaker 2: to onshore industry in this country exactly to work with American.
Speaker 1: Yeah, they're different, they're different things. First of all, Right now,
Speaker 1: with the let's say perceived slow down of EV adoption,
Speaker 1: especially companies that have both ice vehicles and evs, they
Speaker 1: can only invest the dollar once. So right now we
Speaker 1: see let's say shrift back to ice vehicles and therefore,
Speaker 1: but they still need to come out with new models,
Speaker 1: and therefore we have increased interest in Hey, can we
Speaker 1: do things together? So and I expect this to continue.
Speaker 2: Actually, you talked to a moment ago about being dominant
Speaker 2: in your segment, the lead seller in that segment. But
Speaker 2: everyone always asks me if somebody is put off buying
Speaker 2: a tested vehicle, I drive a tested vehicle or model.
Speaker 2: Why But there are many out there that say I
Speaker 2: don't want to buy a tested vehicle. Have you any
Speaker 2: data that says those buyers turn to Lucid in the
Speaker 2: pure play categories that you operate in.
Speaker 1: Yeah. Absolutely, I mean, as I just said, we're now
Speaker 1: the best selling vehicle in the United States in our
Speaker 1: segment that includes the model, our segment. I mean I
Speaker 1: don't compare right now the gravity because we're still ramping up.
Speaker 1: We're in the phase of ramping up. I guess let's
Speaker 1: talk again by the end of this year where we
Speaker 1: stand on the gravity. But the ear Yes, we see
Speaker 1: a lot of incoming. We always actually, by the way,
Speaker 1: had a lot of interest Fumpter's love byers. It's not
Speaker 1: really new, but it has increased. Absolutely.
Speaker 2: This administration is fascinating in Lucid's contexts. Maybe the pro
Speaker 2: EV policy is not there, but supporting US manufacturers is.
Speaker 2: You also have the relationship with Saudi Arabia, and the
Speaker 2: administration in the context of GPUs for example, has been
Speaker 2: supportive in those trade deals. What has the experience been
Speaker 2: like leading this company under the Trump administration in net,
Speaker 2: how do you think you've come out so far?
Speaker 1: Well? I mean, obviously things became more complicated. I mean
Speaker 1: the the tariff situation. I mean, there's no doubt it
Speaker 1: increases our cost and it also creates a lot of
Speaker 1: additional headache because you now have to completely rethink the
Speaker 1: supply chain. Are you continuing certain things or are you localizing? Again,
Speaker 1: that's nothing that happens from one day to the other.
Speaker 1: We are doing okay when you compare to other players
Speaker 1: in the industry. Also from the cost increases, particularly because
Speaker 1: we build everything right now in the United States, and
Speaker 1: we build all of the vehicles, our key components, they're
Speaker 1: all built here in the United States. Having said that,
Speaker 1: we are hit by obviously raw materials or let's say
Speaker 1: Tier two suppliers that we have to import and we
Speaker 1: have to pay teriffs on that. So it's not that
Speaker 1: we are not impacted, but we are less so than others.
Speaker 1: So yeah, I mean it's something we have to do
Speaker 1: to work with and for us, it's also because we
Speaker 1: are a pure EV manufacturer. We believe in the future
Speaker 1: of electrical propulsion. We're not wavering. We're not saying, oh,
Speaker 1: let's do I don't know a range extender or something
Speaker 1: that is not going to happen with LUCID. This is
Speaker 1: part of our vision. You know that this is the
Speaker 1: future and actually important to save our planet. So we
Speaker 1: will find a way through this. But also have to say,
Speaker 1: for the American consumers, vehicles are going to be more
Speaker 1: expensive under the terriff region. There's no other way around it.
Speaker 1: There is. Yes, you can say, oh, you just need
Speaker 1: to localize, well, yes, but that still increases the costs
Speaker 1: because there's a reason why the supply chain is so
Speaker 1: global because certain things are either not available here in
Speaker 1: the US or are just very expensive, so you import them,
Speaker 1: and if you change that, you still have higher cost
Speaker 1: in the United States, which means manufacturers like US are
Speaker 1: actually any manufacturer has to increase prices. There's no other
Speaker 1: way unless you want everybody to be nonprofit organizations, which
Speaker 1: then would lead to no innovation, no technology leadership, and
Speaker 1: I think that's in the current climate. Globally, it's the
Speaker 1: last thing we want.
Speaker 2: The cost of doing business in America. Mark winter offf
Speaker 2: Loucids Interim CEO, one of the core customers at this
Speaker 2: Panasonic De Soto, Kansas plant that is due to hit
Speaker 2: full capacity this year